Our operations team performed well in a challenging environment, gaining customers in the quarter primarily with our Super Value products and also maintaining control of our collections.
Mark E. Speese, Chairman and Chief Executive Officer, Rent-A-Center

Rent-A-Center (NASDAQ:RCII) today announced total revenues for the quarter ended December 31, 2008 were $699.8 million, a decrease of $17.2 million from the total revenues of $717.0 million for the same period in the prior year. This decrease in revenues was primarily the result of approximately 315 fewer stores over the past year principally due to the 2007 restructuring plan. Same store sales for the quarter ended December 31, 2008 were flat.

Net earnings and net earnings per diluted share for the quarter ended December 31, 2008 were $36.1 million and $0.54, respectively, as compared to a net loss of $5.4 million and $0.08, respectively, for the same period in the prior year.

Net earnings and net earnings per diluted share for the quarter ended December 31, 2008 were affected by the following significant items;

--Increased as a result of $4.6 million in pre-tax litigation credits, or approximately $0.04 per share, related to the Hilda Perez and Shafer/Johnson matters;
--Increased as a result of a $4.3 million pre-tax gain, or approximately $0.04 per share, on the extinguishment of debt; and
--Decreased as a result of an additional $1.4 million pre-tax restructuring expense, or approximately $0.01 per share, related to our 2007 restructuring plan.

Net earnings and net earnings per diluted share for the quarter ended December 31, 2007 were affected by the following significant items;

--Decreased as a result of a $38.7 million pre-tax restructuring expense, or approximately $0.39 per share, related to our 2007 restructuring plan; and
--Decreased as a result of an $11.0 million pre-tax litigation expense, or approximately $0.11 per share, related to the settlement of the Shafer/Johnson matter.

When including the significant items above, adjusted net earnings per diluted share for the quarter ended December 31, 2008 were $0.47, as compared to adjusted net earnings per diluted share for the quarter ended December 31, 2007 of $0.42, an increase of 11.9%.

"We are generally pleased with the results for the fourth quarter with total revenue, same store sales and adjusted net earnings per share within our guidance," commented Mark E. Speese, the Company's Chairman and Chief Executive Officer. "Our operations team performed well in a challenging environment, gaining customers in the quarter primarily with our Super Value products and also maintaining control of our collections," Speese stated. "This has allowed us to raise our diluted EPS guidance for 2009. We believe there are opportunities to both retain and attract customers to our "RAC Worry-Free Guarantee" transaction with targeted advertising campaigns to those customers experiencing budget constraints and customers who are affected by the tightening of credit," Speese continued. "Our management team remains focused on enhancing the overall customer experience in our stores, improving operational efficiencies, and maintaining expense control, while generating positive cash flow from operations and maintaining a solid balance sheet," Speese ended.

Year End December 31, 2008 Results

Total revenues for the twelve months ended December 31, 2008 were $2.884 billion, a decrease of $22.0 million from the total revenues of $2.906 billion for the same period in the prior year. This decrease in revenues was primarily the result of approximately 315 fewer stores in the 2008 period, principally due to the 2007 restructuring plan, offset by an increase in same store sales of 2.3%.

Net earnings and net earnings per diluted share for the twelve months ended December 31, 2008 were $139.6 million and $2.08, respectively, as compared to net earnings of $76.3 million and $1.10, respectively, for the same period in the prior year.

Net earnings and net earnings per diluted share for the twelve months ended December 31, 2008 were affected by the following significant items;

--Increased as a result of $4.6 million in pre-tax litigation credits, or approximately $0.04 per share, related to the Hilda Perez and Shafer/Johnson matters;
--Increased as a result of a $4.3 million pre-tax gain, or approximately $0.04 per share, on the extinguishment of debt; and
--Decreased as a result of an additional $4.5 million pre-tax restructuring expense, or approximately $0.04 per share, related to our 2007 restructuring plan.

Net earnings and net earnings per diluted share for the twelve months ended December 31, 2007 were affected by the following significant items:

--Decreased as a result of a $38.7 million pre-tax restructuring expense, or approximately $0.37 per share, related to our 2007 restructuring plan;
--Decreased as a result of an $11.0 million pre-tax litigation expense, or approximately $0.10 per share, related to the settlement of the Shafer/Johnson matter;
--Decreased as a result of a $51.3 million pre-tax litigation expense, or approximately $0.48 per share, related to the Hilda Perez matter; and
--Increased by a $3.9 million pre-tax benefit, or approximately $0.04 per share, as a result of the receipt of accelerated royalty payments from franchisees in consideration of the termination of their franchise agreements.

When including the significant items above, adjusted net earnings per diluted share for the year ended December 31, 2008 were $2.04, as compared to adjusted net earnings per diluted share for the year ended December 31, 2007 of $2.01.

"As a result of our strong operating results, we generated positive cash flow from operations of approximately $384.7 million for the twelve month period through December 31, 2008, while ending the quarter with approximately $87.4 million of cash on hand," commented Robert D. Davis, the Company’s Executive Vice President and Chief Financial Officer. "This significant cash flow enabled us to enhance our capital structure by reducing our outstanding indebtedness by $312.2 million in 2008, or approximately 25% from year end 2007, while internally funding our operations," Davis concluded.

During the twelve month period ended December 31, 2008, the Company also repurchased 951,800 shares of its common stock for $13.4 million in cash under its common stock repurchase program. To date, the Company has repurchased a total of 19,412,750 shares and has utilized approximately $457.8 million of the $500.0 million authorized by its Board of Directors since the inception of the plan.